Question

You can hire someone without experience for $13 per hour or someone with experience for $19 per hour. You believe the

experienced person increases the sales per customer by $3. Each person handles about 12 customers per hour. Should you hire the
experienced person?
a) Yes
b) No

Answer 1

Yes that is the correct

Answer 2

a) Yes

The experienced person costs more per hour, but also increases sales per customer. To determine if it is more cost-effective to hire the experienced person, you would need to calculate the net gain or loss from hiring them.

You can do this by multiplying the increase in sales per customer by the number of customers per hour, and comparing that to the difference in hourly wages.

(12 customers/hour * $3/customer) - ($19/hour - $13/hour) = $36/hour - $6/hour = $30/hour

Since the net gain is positive, it is more cost-effective to hire the experienced person.